UPDATE 1-Gammon Gold says to meet lower end of 2009 forecast

Reuters Staff

2 Min Read

* Q3 production at 51,935 gold equivalent ounces

* Sees Q4 production at 80,000 gold equivalent ounces

* Says to meet lower end of 2009 forecast

* Shares hit 52-week high

Oct 6 (Reuters) - Canada’s Gammon Gold Inc GAM.TO GRS.N on Tuesday said it expects to meet the lower end of its 2009 production outlook on improved performance of its Ocampo mine in Mexico, sending its shares to a new year-high.

The Canadian gold explorer expects to produce between 235,000 gold equivalent ounces and 265,000 ounces at a cash cost of $410 to $445 per ounce this year.

During the third quarter, the company produced 51,935 gold equivalent ounces, down from 57,521 ounces produced a year ago.

Total cash costs per gold equivalent ounce dropped to $501 from $757 a year ago.

Gammon Gold, which is ramping up underground operations at Ocampo underground mine, said it expects to produce 80,000 gold equivalent ounces at a cash cost of $380 to $400 per gold equivalent ounce during the fourth quarter.

“Our operating performance projections for the fourth quarter will showcase just what can be expected from Ocampo in 2010 and we expect to see the company achieve its full-year production and cash cost guidance,” Chief Executive Officer Rene Marion said.

Shares of the company were trading up nearly 13 percent at C$10.58 Tuesday afternoon on the Toronto Stock Exchange. They hit a 52-week high of C$10.82 earlier in the day. (Reporting by Ashutosh Joshi in Bangalore; Editing by Anil D‘Silva)